In 1996, Guinea's Gross Pomestic Product (GDP) was estimated at $3.7 billion. With a population officially calculated at 6.8 million, per capita CDP was $545.
Economic activity in Guinea has been robust over the past neveral years. Real gross domestic product growth (GDP) was 4.7 percent in 1994, and is estimated to have been 4.5 percent in 1995. Inflation dropped from 27.1 percent in 1991 to about 5 percent in the middle of l996. A surge in agricultural production has occurred, in large part because of rehabilitation and renewal of coffee plantations and a significant expansion in areas of rice cultivation. The small-scale enterprises and services sectors - principally construction, agro-industry, transport and trade - have also exhibited significant increases in their activities. Results from a small-scale business sector survey point to a 50 percent increase in the creation of these enterprises since early 1984, with the creation of as many as 40,000 jobs.
Estimates are that real GDP growth in 1996 may not quite reach the original estimate of 4.6 percent. The performance of the economy has been somewhat disappointing this decade in large part due to a deterioration in the terms of trade of 22 percent between 1990 and 1993. The agricultural and small and micro-enterprise sectors have continued to expand but earnings in the key mining sector remained weak throughout l995.
Despite improvements in the world market price for bauxite, the overall slump in the mining sector is expected to continue in 1996. The decision early in 1994 by major aluminum producing countries to cut output may not be sufficient to raise already low world prices for bauxite and alumina. Aluminum prices on the world market hit a two year low in June 1996. Guinea's production is expected to be below historical trends as two out of the three major bauxite or alumina operations are operating at a loss, and face the need to undertake major investments before production can expand. In addition, since 1992, two major mining companies in the mineral sector -- gold and diamonds -- have left Guinea, due to difficulties in conducting their operations. New investors for those minerals must be found.
A cause for optimism was Guinea's successful conclusion in January 1995 of a Paris Club rescheduling agreement with its international creditors providing $170 million in debt relief. Guinea maintained in 1995 conformity with the Expanded Structural Adjustment Facility signed in September 1994 with the International Monetary Fund but the Fund suspended the ESAF in March 1996 and budgetary problems involving increasing deficits have emerged in 1996.
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